CAPITAL POINTE BID DROPPED
Another company steps forward with plans to develop troubled site
A conditional offer to buy the old Capital Pointe site by Royalty Developments Ltd. has fallen through, but another bidder is hoping an appeal going before the courts later this month will still result in a sale.
“We filed the appeal because we believe the judge was in error in not dealing with the offer of Smith Street Lands, which was for $600,000 more than the next closest offer,” Regina lawyer Tony Merchant said in an interview Friday.
Merchant Law Group LLP is representing Smith Street Lands, which made an offer to purchase the land in December.
At the time, Court of Queen’s Bench Justice Bev Klatt confirmed the “judicial sale of the property” to Royalty, a day after hearing arguments from Smith Street Lands and JYR Investment Management Inc./magnetic Capital Group.
The lawyer representing Smith Street Lands at the time argued that while their $2.8 million offer may have come in later than the others, it was still within the time limit.
“Our position is that the court of appeal should one, find error ... and secondly, should then do what the Queen’s Bench judge could have done and should have done, which is approve the Smith Street Lands offer,” said Merchant of the appeal scheduled for March 20.
But there are some technical difficulties that could mean extensive delays and in the end could possibly result in the withdrawal of Smith Street Lands’ offer.
According to Merchant, the city is legislated to charge interest at a rate of 1.5 per cent per month on top of property taxes, which increases the debt to the city by about $40,000 per month.
If the appeal judge decides the issue should go back to the Court of Queen’s Bench, who knows how long it would take for a final decision to be made, he said.
“Let’s suppose it’s another 10 months. Well, but that time, the $2.8 million that we’ve offered wouldn’t be enough money to pay out the city,” said Merchant.
He hopes the City of Regina, which is listed as a third-party respondent on the notice of appeal, will make a submission to the appeal court in support of the offer, and argued any delay in a sale could do damage to Regina and the taxpayers.
Grant Richards, the lawyer representing KEB Hana Bank — which holds the highest-ranked mortgage on the property — confirmed Royalty ’s offer had fallen through.
He couldn’t say exactly why, but noted the developer hadn’t met a condition to get the City of Regina to approve temporary parking on the site to wave the condition by Feb. 16.
The City of Regina confirmed it never received a rezoning application for the site.
JYR Investment Management Inc./magnetic Capital Group had also filed an appeal, but it has since been abandoned.
Merchant said Smith Street Lands have long-term plans for the site, but will be tight-lipped until the sale goes through and development plans are locked down.
He said they also have plans to apply for a rezoning of the land so it can be used as a temporary parking lot.
The long-running saga of the beleaguered site, at the corner of Albert Street and Victoria Avenue, stretches back to 2009 when a company first proposed demolishing the former Plains Hotel and erecting a multi-storey condo and hotel.
We filed the appeal because we believe the judge was in error in not dealing with the offer of Smith Street Lands.